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Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: Shri Waseem Ahmed & Shri T.R. Senthil Kumar
Ashish Kanjibhai The DCIT, Rathod, Circle-2(2)(2), Rajkot Rabhunandan, Vs 4-Rajhans Society, (Respondent) Raiya Road, Rajkot PAN No: ABUPR7023B (Appellant) Assessee by : Shri Mehul Ranpura, A.R. Revenue by : Shri V. J. Boricha, Sr.D.R. Date of hearing : 31-07-2022 Date of pronouncement : 11-10-2023 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-
This appeal is filed by the Assessee as against the appellate order dated 24.09.2021 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “NFAC”), arising out of the reassessment order passed under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year (A.Y) 2012- 13.
Page No 2 Shri Ashish Kanjibhai Rathod vs. DCIT
The brief facts of the case is that the assessee is an individual and Proprietor of M/s. Jagdish Centring Center engaged in the business of Rentals of Centring Materials & equipment to the Civil Contractors. For the Assessment Year 2012-13, the assessable income is below taxable limit, hence the assessee has not filed the Return of Income. The assessee case was reopened as he has made cash deposits of Rs. 14,13,684/- in four bank accounts held by the assessee. In response to the notice, the assessee filed a Return of Income declaring total income of Rs. 1,78,476/- which is below the exempt income. The assesse was issued a show cause to treat the cash deposits in the bank accounts as unexplained income of the assessee. In response thereto, the assessee produced the cash book and explained the source of deposits thereon as follows: Sr. Amt. Rs. Remarks of Credits in Bank Accounts No. 1 1007000 Total Cash Deposit during 2011-12 2 929.5 Dividend Income (Exempt Income already shown in IT Return filed u/s. 148) 3 569664 Refund For Mcx Ipo Applied on 29-02-12 4 11290 Saving Bank Interest Income (Already Considered in IT Return filed u/s. 148) 5 7500 LIC Money Back Amt Received Credited to Capital Account (Sec 10(10D) 6 515 BSNL Telephone Deposit Refund 7 48829 Old Fixed Maturity Amount (Out of Which 3829 int Income Already shown in IT Return filed u/s. 148) 9 27100 Centring Receipts already shown in Profit & Loss Account and in IT Return filed u/s. 148 16728275 Aggregate Credits FY 11-12
The assessee further submitted that the interest income from bank of Rs. 11,290/- is also declared in the Return of Income filed u/s. 148 and thereby requested there is no unexplained cash in the bank accounts and requested to drop the further proceedings. However, the Assessing Officer has not accepted the reply given by Page No 3 Shri Ashish Kanjibhai Rathod vs. DCIT the assessee on the ground that the assessee has not filed the Return of Income up to the assessment year 2014-15 and belated Return of Income were filed for the Assessment Year 2015-16. Further the assessee filed the Return of Income for the present Assessment Year 2012-13 only after issuance of notice u/s. 148. Therefore the books of accounts submitted by the assessee cannot be considered as authentic and the source of cash deposit from sale of agricultural land in the previous year is also not acceptable and therefore added the cash deposit of Rs. 14,43,684/- as the unexplained income of the assessee u/s. 69A of the Act and demanded tax thereon.
Aggrieved against the same, the assessee filed an appeal before Commissioner (Appeals). The Ld. CIT(A) held that only cash book was filed before him, but balance sheet, profit and loss account, capital account, business of bank transaction and proof of source of cash was not produced with bills and vouchers. Further the sale of land was made on 29.12.2010 during the Financial Year 2010- 11, whereas the cash deposits in the bank accounts are during the Financial Year 2011-12 thereby there is a gap of one year in cash deposits. Hence, the explanation of the assessee was not acceptable and thereby confirmed the entire cash deposit of Rs. 14,43,684/- remains unexplained and thereby dismissed the assessee appeal.
Aggrieved against the same, the assessee is in appeal before us raising the following Grounds of Appeal:
1. The order passed by Learned AO u/s. 143(3) r.w.s. 147 is bad in law.
2. Hon CIT(A) has erred in law as well as on facts making addition u/s. 69A of the act of Rs. 14,43,684/- though the transactions are recorded in books of accounts.
Page No 4 Shri Ashish Kanjibhai Rathod vs. DCIT
3. We hereby press one more additional ground with your honour, which was part of our submission to Hon. CIT(A), CIT(A) has erred in law as well as on facts making addition of Cash Deposit in Bank of Rs. 14,43, 684/- is not from the sale of the land without having any evidence of cash received on account of sale is utilized anywhere else.
4. Learned CIT(A) has erred in law as well as on facts levying demand of Rs. 9,52,230/-with interest. 6. Ld. Counsel Mr. Mehul Ranpura appearing for the assessee submitted before us a Paper Book containing the show cause notice issued by Ld. A.O., reply filed by the assessee, cash books for the year ending 31.03.2011 and 31.03.2012 and copy of the Sale Deed and in support of his arguments relied upon the following case laws: (a) Smt. Teena Bethala Vs. ITO (ITA No. 1383/Bang/2019) dated 28/08/2019 (b) DCIT Vs. Karthik Construction Co. (ITA No. 2292/Mum/2016) dated 23/02/2018 (c) Shri Nikhil Nanda Vs. DCIT (ITA No. 3644/Del/2013 (d) ACIT Vs. Baldev Raj Charla 121 TTJ 366 (Delhi)
Per contra, the Ld. Sr. D.R. Shri V.J. Boricha appearing for the Revenue supported the orders passed by the Lower Authorities and pleaded to uphold the same does not require any interference and the appeal filed by the assessee is liable to be dismissed.
We have given our thoughtful consideration and perused the materials available on record including the Paper Book filed by the assessee. It is seen from the Paper Book filed by the assessee and the reply submitted before the A.O., the assessee has clearly explained cash deposits and other transactions in the bank accounts. The assessee has filed its Return of Income admitting an Page No 5 Shri Ashish Kanjibhai Rathod vs. DCIT income of Rs. 1,78,476/- in which Rs. 1,63,357/- is business income from Jagdish Centring Center and Rs. 15,119/- is interest income. Though the assessee produced and explained the cash deposits by producing books of accounts, the same were rejected by the Assessing Officer on the sole ground that the assessee has not filed original Return of Income u/s. 139(1) of the Act and regular Return were filed only from the Assessment Year 2015-16 onwards. It is well settled principle of law that addition u/s. 69A of the Act cannot be made in respect of those assets/moneys/entries which are recorded in the assessee’s books of accounts. The Co-ordinate Bench of this Tribunal in the case of SMT. Teena Bethala Vs. ITO (ITA No 1383/Bang/2019) dated 28/08/2019 held that “….. On a reading of section 69A (supra), it is clear that the onus is upon the AO to find the assessee to be the owner of any money, bullion, jewellery or valuable article and such money, bullion, jewellery or valuable article was not recorded in the books of account, if any, maintained by the assessee for any source of income. In these circumstances, the AO can resort to making an addition under section 69A of the Act only in respect of such monies/assets/articles or things which are not recorded in the assessee's books of account. In the case on hand, the cash deposits are recorded in the books of account and are reportedly made on the receipt from a creditor. Further, the PAN and address of the creditor as well as ledger account copies of the creditor in the assessee's books of account have also been field before the AO. In these circumstances, it is evident that the AO has not made out a case calling for an addition under section 69A of the Act. Probably, an addition under section 68 of the Act could have been considered; but then that is not the case of the AO. The assessee, apart from raising several other grounds, has challenged the legality of the addition being made under section 69A of the Act. In support of the assessee's contentions, the learned AR placed reliance on the decision of the ITAT - Mumbai Bench in the case of DCIT Vs. Karthik Construction Co. in dated 23.02.2018, wherein the Bench at para 6 thereof has held that addition under section 69A of the Page No 6 Shri Ashish Kanjibhai Rathod vs. DCIT
Act cannot be made in respect of those assets/monies/entries which are recorded in the assessee's books of account. In my considered view, the aforesaid decision of the ITAT - Mumbai Bench (supra) is squarely applicable to the facts of the case on hand, where the entries are recorded in the assessee's books of account. In this view of the matter, I am of the opinion that the addition of Rs.6,30,000/- made under section 69A of the Act is bad in law in the facts and circumstances of the case on hand and therefore delete the addition of Rs.6,30,000/- made thereunder. The AO is accordingly directed.” 8.1. Ld Delhi Tribunal in the case of Shri Nikhil Nanda v/s DCIT I.T.A.No.3644/Del/2013 held that “In view of the findings above that the appellant had substantial cash withdrawals from which the cash deposits had been made in the bank account and also in view of the fact that the AO has not brought any evidences on record to show that the money withdrawn was used for any other purpose other than being redeposited in the bank account, the addition made by the AO cannot be sustained. Respectfully following the decision of the Hon'ble ITAT Delhi in the case of Baldev Raj Charla and Ors. discussed above and other judicial decisions discussed above and the facts of the case the addition made by the AO is deleted." 8.2. In the case of ACIT vs Baldev Raj Charla 121 TTJ 366 (Delhi) also held that merely because there was a time gap between withdrawal of cash and cash deposits explanation of the assessee could not be rejected and addition on account of cash deposit could not be made particularly when there was no finding recorded by the assessing officer or the Commissioner that apart from depositing this cash into bank as explained by the assessee, there was any other purposes it is used by the assessee of these amounts. In view of above facts, the ground number 1 of the appeal of the assessee is allowed and orders of lower authorities are reversed.
Page No 7 Shri Ashish Kanjibhai Rathod vs. DCIT
Respectfully following the above decisions of the Co-ordinate Benches of this Tribunal, we have no hesitation in deleting the additions made by the Assessing Officer. Thus the grounds of appeal raised by the assessee is hereby allowed.
In the result, the appeal filed by the Assessee is allowed.